TMX readying for showdown with Nasdaq over Canadian tech unicorns

Who owns Canada’s largest stock exchange is attempting to help make the company more enticing to technology startups amid new competition from Nasdaq Inc., the global heavyweight in tech listings.

TMX Group Ltd. wants more tech firms on its venue for businesses, the TSX Venture Exchange, with the objective of attracting companies from Silicon Valley and Canada’s technology hubs, Ceo Lou Eccleston told reporters in Toronto on Thursday. TMX is cutting administrative and compliance costs and combating the perception the Venture Exchange is only for natural-resource firms, he added.

Nasdaq recently agreed to buy Chi-X Canada, which competes with the TMX platforms and handles roughly an eighth from the country’s stock trading. Nasdaq’s main U.S. exchange is home to the 4 biggest technology companies in the world – Apple Inc., Alphabet Inc., Microsoft Corp. and Facebook Inc. – which together possess a market price of US$1.9 trillion. That’s bigger than the entire US$1.6 trillion Canadian equity market. Eccleston said his company can fend off Nasdaq.

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“Nobody is just likely to walk in and hang a shingle and take business,” said Eccleston, who recommends buying TMX shares after they plunged about 18 per cent following news of Nasdaq’s acquisition on Dec. 8. “I think there’s been a large overreaction. I believe everybody is like, ‘Not again, that name is coming in.’”

TMX’s markets, including the Toronto Stock market, handle about 70 per cent of Canadian equity trading volume.

The company’s new initiative comes amid a renaissance in Canada’s tech scene, where Ottawa-based Shopify Inc.’s debut as a US$2-billion stock earlier this year has stoked speculation Canada hosts more tech unicorns – or startups worth US$1 billion or more.